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Debt Management

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Holidays

How to Ditch Debt

Monday, January 3, 2005

(CBS) The National Retail Federation says consumers spent $220 billion this holiday season, and while many shoppers said they were going to put the deep freeze on their credit cards, there are plenty of people now facing a blizzard of bills that will take months, even years to dig out from.

The Early Show consumer correspondent Susan Koeppen says consumers who braved the holiday crowds put plenty on plastic this holiday season, and now that the joy of giving is over, they're bracing for the pain of paying.

While some were responsible and put money aside each month to pay up front for holiday purchases, others weren't as conscientious.

Susan Shain told Koeppen her debt is "very stressful."

Shain is a single mother, working two jobs so she can pay off more than $35,000 in debt.

Nearly $9,000 of it is from the Christmas shopping she's done over the past few years, about $1,000 of it this holiday season.

"I did it for my daughters, and it made them happy; there are just some things you can't put a money amount on," Shain says.

Her daughters, Melanie and Nicole, got new toys and jewelry this Christmas, but Shain added more bills to an already large pile.

Bankruptcy attorney Charles Juntikka observes that, "There's a lot of consumer debt that is built up right at December because of the holidays."

He says many consumers don't realize the financial damage they're doing if they overspend using credit cards. "If you can't pay that off within a month or two, you didn't spend $4,000 or $5,000 - you're hooking yourself into spending - if you're taking a couple years to pay this off, (it's more) like $10,000."

Shain has a New Year's resolution: to get out of debt.

She's signed up with a credit consolidation company to help her pay her bills. "That is my goal," Shain stresses. "And I will achieve it. And I will make sure that I never get back into it again."

Shain still plans to give her daughters a wonderful Christmas in 2005, but she'll be doing it on a budget.

Howard Dvorkin, a credit counselor and founder of Consolidated Credit Counseling Services, is also the author of "Credit Hell: How to Dig Out From Debt," due out next month.

It was Dvorkin's firm that Shain called.

Dvorkin says she made right move when she called a professional. From that conversation, he says, she was able to figure out a good solution and stuck with it. Shain called a credit counselor, put herself on a monthly plan, and she'll start digging her way out.

Seeking help from credit counselor is a good idea, he says, because you're getting some good advice from a neutral party. In an age when everyone is trying to sell something, the last thing you want is someone trying to sell you their advice or some get-out-of-debt scheme.

 

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